Liquor Privatization In Washington State, One Year Later

As of June 1, it will be one year since grocers, big box stores and other private retailers started selling liquor in Washington state. The voter approved privatization initiative has sent prices unexpectedly higher. Also, the government is collecting more tax revenue than anticipated.

The initiative to privatize the state's liquor monopoly was designed to keep public treasuries whole. It's done that and a lot more. The state expects to collect around 37 percent more from liquor taxes and fees in this current fiscal year compared to the final year under state control.

This fiscal year's anticipated revenue of $425 million includes some onetime gains. FY2014's estimated haul is $369 million. By contrast, the final year of state control brought in $309 million.

Prices jumped after privatization and are slowly falling back. Washington's Department of Revenue estimated the average price for a single bottle of spirits was 7 percent higher this March than last March.

Bruce Beckett, director of government affairs for the Washington Restaurant Association, says some of "the kinks" in the transition are still working themselves out. "We're quite pleased to see that competition appears to be now moving in a positive direction."

A fee charged to distributors is scheduled to go down a notch next year, which may lower prices a little bit more if the distributors pass though the savings.

Opponents of liquor privatization feared that making liquor sales more convenient would increase drunk driving. For that issue, the Washington Traffic Safety Commission has only partial data through the end of 2012. Fatal crashes involving a drinking driver happened less often in the second half of last year -- after privatization -- compared to the same period in the prior two years.

Availability of spirits has indeed soared after privatization. Today, consumers can buy liquor at more than 1600 retailers in Washington compared to 329 state-run and rural contract stores before.

Northwest Grocery Association president Joe Gilliam says customers are happy about the greater convenience. "And we've seen that happen without the doomsday warnings and propaganda... that there would be increases in DUI's," says Gilliam. "That's really good news as well."

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OLYMPIA, Wash. – Statewide liquor sales in Washington are up since privatization took effect in June. But business is down dramatically at some former state-owned liquor stores.

At Rainier Park Liquor, it used to take two clerks during the day. Three at peak times. Now manager Kevin Dziedzic says one person can mind the store most of the time. Business is so slow he even had to lay-off the owner’s brother.

“Definitely just have to be wiser with the money we spend,” Dziedzic says.